Posts Tagged ‘debt collectors’

Debt Collectors Using Facebook?

A recent story in the Arizona Daily Star revealed how one debt collection firm pressured a businessman into paying what he owed based on information gleaned from his Facebook page. The businessman had apparently claimed to be broke and filing for bankruptcy, yet he was stupid enough to post pictures of his new Corvette and pictures of a recent fishing trip to Florida. The debt collector was able to use this information to get the fellow to pay up.

The fellow in this story clearly had the funds to pay what he owed. However, he is not among the majority of people hounded by debt collectors day in and day out in this country. Especially with the economy being as bad as it is. The fact that debt collectors are now sniffing around the social media for information that they can use to put pressure on debtors is concerning.

For one, privacy is at issue. Clearly, the information that people put up on the social media is meant only for people who know them. The fact that debt collection companies have now joined in with prospective employers in sniffing around the Internet for information on people is more than a little creepy. Having said that, if you put your life-story on the Internet for anyone to read, how much privacy can you reasonably expect to have?

For another,  how credible is information that people reveal about themselves on the Internet? Anyone could post stock images of a nice car or home and say that they belong to them. It is called bragging and the relative anonymity of the online world allows for such liberties. Of course, using your real name online reduces this anonymity somewhat, but still, you can be a millionaire online even if your bank account is empty.

I suspect that if the debt collection industry makes searching the Internet for information they can use against debtors to pressure them to pay becomes more widespread, that more than a few court cases will come up about the issue. How the courts will decide is anyone’s guess.

For the time being, I strongly suggest that people who use social media like Facebook and Myspace to share details of their lives change their settings so that only people who know them can access their pages. You don’t need to share your information with the entire world…especially if you value your privacy.

Debtors’ Prison?

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Although jailing people for unpaid debts was made illegal in the 19th century, in some states, particularly creditor friendly states like Minnesota,  it appears that debtors’ prisons still exist.  A Minneapolis Star Tribune story revealed a disturbing practice by the debt collection industry: using the power of a bench warrant to arrest debtors for failure to appear at court hearings.

The way it starts is that the debt collector gets a default judgment, which gives them the power to garnish wages, levy bank accounts, and seize personal property in order to satisfy the judgment. As part of the process, a hearing is conducted where the debtor must reveal his income and property to the debt collector.  While the individuals in the story were not technically arrested because they owed money, the judges oftentimes set the bail at the amount of the debt.

The story also mentions a couple of other states the connection between the person’s arrest and the debt is more direct: Indiana and Illinois. In one case, an Illinois judge ordered a man jailed for an indefinite period until he could pay $300 toward a debt to a lumber yard.

While most people will not face jail time for unpaid debts and while certainly, debtors’ prisons are no longer legal, the out of control debt collection industry has never particularly cared about what is legal and what isn’t.  Most debt collectors at best straddle the law and at worst outright ignore it.  The tactics of one firm caused this Florida man so much grief that he committed suicide. His family is now suing that firm for wrongful death.

There are steps you can take to avoid the worst debt collection tactics:

1: If you are sued, do not allow the debt collector to get a default judgment by failing to file an answer in time. In most states, you have up to 30 days to file a response.  While you may file the answer yourself, consulting with an experienced consumer law and/or bankruptcy attorney  is highly recommended. If you cannot afford an attorney, there are many who provide legal services to low income individuals for free or at a very low cost. You can find one in your state by going here.

2: Consult with a credit counseling/debt management agency. A credit counselor will work with you and your creditors to arrange a payment plan that you can afford and that will have your debts paid off in a few years. Most creditors will work with debt management counselors to lower your payments to an affordable level and will stop collection efforts once they are aware that you are on a debt management plan.

3: If you have no income or your current income is so low that you can barely cover your necessities, then it’s time to file for bankruptcy. Chapter 7 bankruptcy can protect you from judgments and creditor lawsuits. To find a bankruptcy attorney you may go here or here.

New York Attorney General Cracking Down On Debt Collectors

In one example of the on-going efforts by New York Attorney General, Andrew M. Cuomo to go after fraudulent debt collectors, the AG has sued attorney John, P. Nicolia for selling the use of his name to a debt collection firms who then, in his name, threatened to sue consumers across the United States.

The investigation determined that although Nicolia had received $141,000 in fees from the debt collection firm, Eastern Asset Management, there was no evidence that any legal services were provided. Eastern Asset Management only used Nicolia’s name and the name of Nicolia’s law firm to intimidate people into paying. 

While the New York Attorney General is to be commended for taking action against abusive debt collectors, this type of governmental action occurs only rarely and is certainly not enough to discourage debt collectors from resorting to illegal tactics.

I’ll close this article by reminding anyone who receives any sort of legal threats from a collection agency to not be intimidated and to never settle based on such threats. The amount demanded is usually far in excess of what you actually may owe, and very often, these threats have no legal basis.  At the very least, before you pay a dime, make the collection agency prove up what they say you owe and make them prove that you owe THEM.

Debt Collectors Are Scum: It’s The Truth!

Even David Ramsey, one of the “personal responsibility” gurus, thinks so:

 

 

 

Understandably, no one wants to hear from the debt collector and most collection activity is not viewed in a positive light. Having said that, debt collectors have earned their shoddy reputations and 90% of them violate the law with every call they make.

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Wage Garnishments On The Rise : How To Protect Yourself

gavel As the economy continues to sour and more people fall behind on their bills, more people find themselves being sued by their creditors, or more accurately, by debt collectors. 

Because most people don’t know how to react to being sued and very often do not show up to court, creditors largely win by default. Once a court judgment has been entered, then the creditor may collect by garnishing wages, in most cases, a quarter of take-home pay. Especially in this economy, where every dime counts, having a quarter of your wages disappear into a garnishment can be devastating.

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Judgmental, Much?

This post, in response to this one is yet more evidence that the sanctimonious “live within your means” and “pay your bills no matter what”  hyenas have no empathy.

Obviously, Abigail has never taken a financial misstep in her life, so much so, that she feels she is eminently qualified to sit on her high horse and shake her proverbial finger at everyone else.

My heart goes out to Emily, the author of the original post. I can’t imagine how hard it has been for you, losing a child,  while facing your financial difficulties. I want to thank you for sharing your story and I hope that you and your husband make the most of the second chance that bankruptcy affords you.

Now for my response to Abigail’s post:

 

Yes, thank goodness those creditors won’t get more things to help make up for the losses they’re taking on your debts. Nothing but gratitude that those vultures — they want you to pay back what you spent! — don’t get your stuff to make up for taking a chance on you and losing. Suck on that, people who expected you to live up to your responsibilities!

Aside from the fact that credit card companies and banks encourage people to take on debt, even when it may not be in their best interests to do so, no one ever borrows money without intending to pay it back. Defaults are just a cost of doing business for these “creditors.” Please don’t make it sound like there are actual “people” who are being denied their due, much less being hurt by the fact that someone who got in over her head took advantage of bankruptcy protection afforded by the Federal government.

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How To Stop Creditors Calling: Tell Them To Cease & Desist

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No matter what walk of life you come from you probably count debt collection agencies as the scum of the Earth. They are the kind of operation that works down in the infested underbelly of society, squeezing money out of those least able to pay by using questionable tactics.

While the debt collection industry has never been popular, it has done nothing to alleviate this bad image. In fact, more and more collectors are employing aggressive tactics, tactics that walk a fine line between what is legal and what isn’t. As a result of increased business, and as a result of these extra-legal tactics, complaints against the collection industry top the charts. During the first half of 2009, FTC complaints against collection firms had risen nineteen percent when compared to the same period in 2008.

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